Soapbox: It’s time to be more proactive about wage gap

On April 15, the League of Women Voters of Larimer County held a panel discussion on “Income Inequality: Loss of the American Dream?” with four panelists: Professor Daniele Tavani, CSU Economics Department; Professor Bradley Macdonald, CSU Political Science Department; Julie Brewer, executive director of the Fort Collins Housing Authority; and Don Marostica, Chairman of the Colorado Fiscal institute. What they revealed in their presentations about the widening disparity in income and wealth in this country and in Colorado was informative and hard to believe.

In fact, as two of the panelists indicated, Americans in general have a much greater tolerance of income disparity than their counterparts in Europe. A YouTube video, Wealth Inequality in America, http://youtube.com/watch?v=QPKKQnijnsM, shown by Professor Tavani demonstrated what Americans think income inequality should be, what they think it currently is, and then what it really is — a great misperception on the part of most people.

Actually, the top 1 percent of all households in the U.S. has captured 95 percent of all income gains the first three years of the economic recovery and own 40 percent of the nation’s wealth. This is triple what it was in 1976. Further, in the 1970s, the average CEO’s earnings were 40 times that of the average worker’s; now it is 380 times larger.

Colorado ranks 24th in the nation in economic inequality. Over the past three decades, the bottom 20 percent of Coloradans have seen their wealth decrease 11 percent, the middle has seen 2 percent growth, while the top 20 percent has experienced almost a 12 percent growth.

The consequences of a stagnating or even descending middle class show up in the inability to get loans for college or for other needs, difficulty in finding affordable housing, and generally in continuing to live what had been a middle class life. For the working poor, life has become even more of a struggle. It would take a wage of $17.61 per hour to be able to afford a two-bedroom apartment in Fort Collins or, at minimum wage, it would take 2.2 earners working a 40-hour week.

Of course, it has consequences for our political process as well. Studies have shown that citizen participation in electoral politics are clearly linked to income and that organized groups representing corporate and wealthy interests continue to have a growing undue influence on and political advantage over policy making at all levels of government.

All panelists agreed that the issues involved were complex and there was no one magic solution. Since 70 percent of our GDP is based on consumer spending, it seemed clear that a strong middle class is needed to sustain our economy. There is only so much consumer spending the ultra-rich can contribute. Other suggestions by the panelists included improving K-12 education, closing tax loopholes, increasing the top tax rate, and raising the minimum wage.

In other advanced countries, where the middle class has fared better than those in the U.S., governments have taken more aggressive steps to raise the take-home pay of low- and middle-income households. Perhaps the time has come for our government to do so as well.

Betsy Gammill-Hayes serves on the Affordable Housing Team for the League of Women Voters of Larimer County.